Specialist Mortgage Lending Guide

1. Broader Criteria

Specialist Lenders typically cater to more borrowers by offering Mortgages to those with unusual circumstances.

2. Higher risk tolerance 

These lenders are willing to take on higher-risk borrowers, which often means they will work with individuals who have been turned down by traditional lenders.

3. Expertise

Specialist lenders often have a deeper understanding of niche markets, such as self-employed individuals or those with adverse credit, and can provide more informed guidance.

Specialist mortgage lenders can be invaluable in situations where traditional lenders are unable or unwilling to provide a mortgage.

Below are examples of where a specialist mortgage lender might be your best option.

1. Poor Credit History

If you have a poor credit history, traditional lenders may view you as too risky to lend to. However Specialist Lenders will typically consider applicants that have had missed payments, defaults, County Court Judgments (CCJs), or even a previous bankruptcy. 

2. Self Employed or Contractors

Self-employed applicants can often have a tougher time obtaining a mortgage than employed applicants. Specialist Lenders will often be more flexible with the Self Employed and Contractors, and will often be able to lend more than what traditional High Street Lenders would. 

3. Non-Standard Properties

If the property you wish to purchase is considered non-standard, such as a property not made from Brick, or a house with unusual features, you might find it difficult to secure a mortgage from a mainstream lender. This is where Specialist Lenders again can come in and help.

4. Irregular or unusual income

Borrowers with income from multiple sources, seasonal work, investments, or other non-traditional means often face challenges when applying for a mortgage. Specialist lenders are more likely to consider these unusual income streams.

5. Older Borrowers

An area often overlooked when discussing Specialist Lending. But if you are an older borrower, particularly those approaching or past retirement age, traditional lenders might be reluctant to offer a mortgage due to concerns about income stability in later years. Specialist lenders often have products specifically designed for older borrowers, including lifetime mortgages or retirement interest-only (RIO) mortgages.

Well, something had to give right?

And the simple answer is, yes! Specialist Mortgage Lenders will often be more expensive as detailed below:

1. Higher Interest Rates

Specialist lenders often charge higher interest rates compared to mainstream lenders. This is primarily because they are taking on more risk by lending to individuals with more complex financial situations and properties which may be more difficult to sell should the borrower default.

2. Higher Fees

In addition to higher interest rates, specialist mortgages often come with higher fees. This could include arrangement fees, valuation fees, and early repayment charges. 

3. Additional Fees

Some Specialist Lenders will also charge other fees that typically High Street Lenders wouldn’t. For example, application assessment fees which are usually around £200 and are often not refundable. Something to bear in mind, if you are on a tight budget.

There are some other things to consider which may negatively affect the appeal of Specialist Mortgage Lenders:

1. Higher Deposit Requirements

Some specialist lenders may offer lower Loan to Value (LTV) ratios, meaning you’ll need a larger deposit to secure the mortgage. For example, while a traditional lender might offer a mortgage at 95% LTV, a specialist lender might only offer 85%, requiring you to provide a 15% deposit. This can make it more challenging for borrowers who have limited savings.

2. More Admin

Specialist Lenders will typically ask a lot more of you than what a typical High Street Lender would. This could mean they request more Bank Statements and proof of income documents for example. But usually they will also require you to print out and sign a few documents too. By no means a mind changer, but certainly something to know.

3. Longer Process

Typically the process with a Specialist Lender will be much longer. This is usually due to the amount of items requested, but also due to less focus being put on delivering a service.

1. Kensington

Kensington Mortgages is known for offering a range of products to borrowers with irregular income, adverse credit, or those who are self-employed. They are particularly well-regarded for their understanding of complex financial situations and their willingness to lend to those who might struggle to secure a mortgage elsewhere.

2. Pepper Money

Pepper Money specializes in providing mortgages to borrowers with a history of credit issues. They offer a range of products designed to help people rebuild their credit while securing a mortgage. Pepper Money is known for its flexible approach to underwriting, taking the time to understand each borrower’s unique circumstances.

3. Precise

Precise Mortgages caters to a wide range of borrowers, including those with credit problems, self-employed individuals, and buy-to-let investors. They offer a variety of products, including residential mortgages, buy-to-let mortgages, and bridging finance. Precise Mortgages is known for its flexible lending criteria and competitive rates.

4. Aldermore

Aldermore Bank is a well-established lender that offers a range of mortgage products, including those for first-time buyers, self-employed individuals, and borrowers with complex incomes. They are known for their flexible underwriting approach and willingness to consider applications that might be rejected by mainstream lenders.

5. Together

Together is a specialist lender that focuses on providing mortgages for niche borrowers, including those buying non-standard properties or those with complex financial situations. Together is known for its ability to offer bespoke mortgage solutions tailored to the specific needs of its customers.

6. Bluestone

Bluestone Mortgages is a specialist lender that offers products designed for customers with adverse credit or self-employed individuals. They offer a range of mortgage solutions, including those for first-time buyers, home movers, and remortgages. Bluestone Mortgages is known for its flexible approach and willingness to consider applications from borrowers with a range of financial circumstances.

7. Foundation Home Loans

Foundation Home Loans specializes in buy-to-let mortgages and complex mortgage cases. They offer a range of products designed to meet the needs of professional landlords, as well as those with unusual financial situations. Foundation Home Loans is known for its competitive rates and flexible underwriting criteria.

8. Vida Homeloans

Vida Homeloans is a specialist lender that offers a range of products to borrowers with impaired credit histories, including those with CCJs, defaults, or bankruptcies. They are known for their flexible approach to lending and their willingness to consider applications from borrowers who might struggle to secure a mortgage elsewhere.

9. The Mortgage Lender

The Mortgage Lender provides a variety of mortgage products designed for borrowers with complex financial situations. They offer competitive rates and flexible terms, making them a popular choice for those who have been turned down by mainstream lenders. The Mortgage Lender is known for its customer-centric approach and commitment to finding solutions for difficult cases.

10. Saffron Building Society

Saffron Building Society is a flexible lender that offers products for self-employed individuals, those with unusual property types, and borrowers with complex incomes. They are known for their personalized approach to lending and their willingness to consider each borrower’s unique circumstances.

The only way to ensure you are getting the cheapest possible Mortgage with the cheapest Specialist Lender is by speaking with a whole of market Mortgage Advisor, such as ourselves.

Most Specialist Lenders will only offer Mortgages via a Mortgage Broker, because they typically don’t employ their own Mortgage Advisors.

Not every Lender will accept you when your circumstances are complex, and that is where a whole of market Mortgage Advisor is worth their weight in gold, as they will know which Lenders will and won’t accept you.

They then just need to establish which Lender is best and cheapest for you.